The summer of 2008 was a jittery time on Wall Street. A crippled Bear Stearns had already sold itself off at a bargain rate to JPMorgan Chase, the housing market was turning to quicksand, and whispers were circulating about the health of Fannie Mae and Freddie Mac, the government-sponsored entities that owned or secured more than 70% of home loans in the United States. But then-Treasury Secretary Henry Paulson told Congress and the public that the Bush administration was not planning any drastic moves for the mortgage giants, which together were holding more than $5 trillion in housing-related securities and other debts.

Paulson, however, told a much different story behind closed doors on July 21, 2008, when he met with a Who’s-Who list of hedge-fund managers. Over lunch, the top man at the Department of the Treasury (and former head of Goldman Sachs) informed the investors that the administration was seriously considering taking over Fannie and Freddie, a move that would effectively wipe out much of the stock held in them.

One of the fund managers who attended the meeting told Bloomberg that he was shocked by Paulson’s disclosure, which amounted to providing Wall Street barons with insider information.

There’s no evidence that the investors took advantage of Paulson’s tip—“tracking firm-specific short stock sales isn’t possible using public documents,” wrote Bloomberg’s Richard Teitelbaum, adding that Paulson technically did not break the law by disclosing the plans for Fannie and Freddie.

But that doesn’t mean Paulson’s wasn’t acting unscrupulously.

“Without a full and convincing accounting, we are left with a picture of a Treasury Secretary who took care of his buddies while allowing the system to blow up,” wrote Jesse Eisenger at ProPublica. “This is the kind of thing that a crony capitalist system–and only such a corrupt system–would allow.”

On the day of the meeting, Fannie Mae’s stock was listed at $14.13 a share and Freddie Mac’s at $8.75 a share. When the government took over both companies on September 6, their share prices both dropped below $1.